Reference no: EM133074526
Question - Jill's Wigs Inc. had the following balance sheet last year:
Cash $800 Accounts payable $350 Accounts receivable $450 Accrued wages $150
Inventory $950 Notes payable $2,000 Net fixed assets $34,000 Mortgage $26,500
Common stock $3,200 Retained earnings $4,000
Total assets $36,200 Total liabilities and equity $36,200
Jill has just invented a nonslip wig for cancer patients which she expects will cause sales to double from $10,000 to $20,000, increasing net income to $1,000. She feels that she can handle the increase without adding any fixed assets. Will Jill need any outside capital if she pays no dividends and, if yes, how much?